Ruling on Establishing Associations Operated by Teachers or Employees in Their Workplaces
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These small associations that teachers run in their schools or employees in their departments, we see them, and they are known to everyone, of course! The Shaykh: No, define them. I may know them, but perhaps others do not.
The questioner: Yes, O Shaykh! The employees participate in it, and their number—let us suppose— is twenty people, and each of them pays two thousand riyals every month, and they take it in rotation. The Shaykh: To whom do they pay it?The questioner: They pay it to one of them,And so in rotation. The Shaykh: so he ends up with twenty thousand: two thousand from his side and eighteen thousand from the others.
The questioner: Yes, and they take it in rotation, but we see that in this association they impose a condition that one must lend in order to borrow. Is there anything wrong with this condition?The Shaykh: No, there is nothing wrong with it; it is fulfilling a covenant. For example, if they collect twenty thousand or eighteen thousand and give it to a man, they must fulfill their obligation.
The questioner: If one of them, for example, said: I do not have any, but I want you to lend to me, they would not lend to him.
The Shaykh: This is known, meaning the benefit is shared.
The questioner: Is it not permissible in a shared benefit?
No, no, absolutely not; because this benefit is for everyone. The prohibited benefit is when the one who benefits is the lender alone. But if it is from both sides, there is no harm.And from that, namely: If a man has land—his own land—So a farmer came to him and said: and I want to farm it on the condition that you lend to me to buy seeds, pay the workers, and the like, and he says: Yes, there is no harm in this; because here the farmer benefits and the landowner benefits, and there is no harm in this. What is prohibited is for the benefit to be for the lender alone; because in that case, he is the one taking riba (usury or interest). If he lends, for example, ten thousand and imposes another condition from which he benefits, it is as if he lent ten thousand and took ten thousand plus more, and then it becomes riba (usury or interest). But if it is for the benefit of both parties, there is no harm in that.And I have mentioned this, namely: That if it is a loan for the benefit of both parties; Ibn al-Qayyim (may Allah have mercy on him) mentioned this in his book Tathib Sunan Abi Dawud.
The questioner: Yes, O Shaykh! The employees participate in it, and their number—let us suppose— is twenty people, and each of them pays two thousand riyals every month, and they take it in rotation. The Shaykh: To whom do they pay it?The questioner: They pay it to one of them,And so in rotation. The Shaykh: so he ends up with twenty thousand: two thousand from his side and eighteen thousand from the others.
The questioner: Yes, and they take it in rotation, but we see that in this association they impose a condition that one must lend in order to borrow. Is there anything wrong with this condition?The Shaykh: No, there is nothing wrong with it; it is fulfilling a covenant. For example, if they collect twenty thousand or eighteen thousand and give it to a man, they must fulfill their obligation.
The questioner: If one of them, for example, said: I do not have any, but I want you to lend to me, they would not lend to him.
The Shaykh: This is known, meaning the benefit is shared.
The questioner: Is it not permissible in a shared benefit?
No, no, absolutely not; because this benefit is for everyone. The prohibited benefit is when the one who benefits is the lender alone. But if it is from both sides, there is no harm.And from that, namely: If a man has land—his own land—So a farmer came to him and said: and I want to farm it on the condition that you lend to me to buy seeds, pay the workers, and the like, and he says: Yes, there is no harm in this; because here the farmer benefits and the landowner benefits, and there is no harm in this. What is prohibited is for the benefit to be for the lender alone; because in that case, he is the one taking riba (usury or interest). If he lends, for example, ten thousand and imposes another condition from which he benefits, it is as if he lent ten thousand and took ten thousand plus more, and then it becomes riba (usury or interest). But if it is for the benefit of both parties, there is no harm in that.And I have mentioned this, namely: That if it is a loan for the benefit of both parties; Ibn al-Qayyim (may Allah have mercy on him) mentioned this in his book Tathib Sunan Abi Dawud.